The need to make and efficiently track payments is a major concern for business and individuals alike. Generally, there are separate lines of processing for each payment type and particular payment locations may only accept or prefer certain payment types but not others. For instance, a small merchant may not accept a credit card because he does not want to pay the high cost of the credit card payment transaction, just as a large entity may prefer not to accept checks as payment due to the amount of manual labor required to process the payment and the systemic risks. As technology advances, both payees and payors will want faster, more efficient, more secure, and more transparent payment processes across all payment types. Convergence of payment types and changes in security settlement regulations will result in a corresponding convergence in delivery and payment channels. This evolution will require financial institutions to: meet changing regulations; use the most convenient payment instruments; improve productivity; reduce operational, credit, and systemic risks; reduce costs and capital investments; and improve funds availability.
Present payment solutions include Electronic Check Present (ECP), Image Cash Letter Exchange Image Replacement Document (IRD), Automated Clearing House (ACH), and ATM Enhanced Message Structure (EMS), and credit cards. Based on processing cost, funds availability, and credit and systemic risks, each has its respective strengths and weaknesses. Each of the above solutions is generally fixed to a single type of payment and does not integrate processing across different payment types. Also, many of the above solutions are cost prohibitive to all but the largest institutions. In all solutions but ACH, the cost of presenting an electronic check is projected to be more expensive than presenting a traditional paper check. However, some merchants do not like to use ACH as payment mechanism due to the potential payment risks. For example, under ACH a return can occur 45 days after the good has been provided to the consumer.
In view of the disadvantages of the present state of the art, it would be desirable to develop an integrated method for end-to-end real-time capture, processing, management and clearing, which increases availability, lower costs, reduce risks, and thus overcomes the above-described inadequacies and shortcomings.